When I bought my used pickup 4 years ago, interest rates for used cars was about 1% lower than they are now. Why have they gone up while mortgage interest rates have gone down?
My guess is that since new car interest rates have plummeted due to car manufacturer zero interest programs, lenders are increasing used rates to make up for lost busines on new car financing. They can get away with increasing rates if other competitors do likewise. The new car programs have also lowered used car values and the lender has to charge more just to remain even again.
I don't know the answer but do have a question for you. Are you sure you're comparing apples to apples?
Are you looking at the same age vehicle now as then? Loans on older vehicles are often charged higher rates. Are you looking to finance it for the same term? Longer terms are often charged higher rates. Each of these things can affect the rate offered by lenders. Lots of lenders are now adjusting rates based on Fair-Isaac scores, too. Lower scores can be charged higher rates.
Just as I promised...no answers...just some thoughts to consider. I hope this helps. [img]/forums/images/icons/smile.gif[/img]
Yeah, I did make a mistake. The rates for vehicles over 6 years old is still the same for a 48 month loan, not 1% higher. It hasn't gone down though, like mortgage rates have.
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